“Biden’s eco-agenda will open up great opportunities for Japanese producers in the US”

A new dawn for alliances

What a Biden administration means for Japan and the EU

 


JANUARY 2021 Feature / Text by Dan Sloan


Japan has not hosted an ambassador from the United States of America since July 2019. While it doesn’t indicate a collapse in bilateral ties, the vacancy symbolises changes in the longstanding relationship.

Over the past few years, the US’s tack on trade and the environment has differed from Japan’s, just as it has veered away from that of another ally, the EU. Nonetheless, with China’s ascendance and growing multilateral diplomacy, evolution in the relationship between Washington, Tokyo, and Brussels was inevitable.

Thus, it was not surprising that Japanese Prime Minister Yoshihide Suga didn’t wait for certified election results to make a congratulatory call to then-President-elect Joe Biden in November in hopes of shoring up relations. With a new administration in Washington and a number of recent initiatives from Tokyo, the two countries are primed for greater alignment.

“Under President Donald Trump ties were good, but mostly because [former] Prime Minister Shinzo Abe deferred on every request,” says Jeff Kingston, professor and director of Asian Studies at Temple University. “On China, Japan’s ‘neo-cons’ were happy. But on almost every other significant issue, Trump was a disaster, such as with the Trans-Pacific Partnership (TPP), the Paris Agreement, the Iran nuclear deal, and a bilateral agricultural deal.”

Now, US allies should see improved trade. The Trump administration imposed tariffs on many countries, including Japan and nations in Europe, but there are expectations for relief under Biden. As vice president, Biden had been a proponent of the $5-trillion TPP. Trump pulled the US out of the trade bloc, but the new president may join pending negotiations.

The European Commission (EC) set out its hopes for an improved relationship with the US in a December statement titled “A new EU–US agenda for global change”, which outlines plans for a joint stance on taxes and regulations on major technology firms. The EU also aims to work with the US on reforming the World Trade Organization and to “solve bilateral trade irritants through negotiated solutions”.

Analysts, though, say the new president will first focus on the pandemic and the domestic economy.

“Biden very much wants to make controlling the coronavirus a top priority,” says Glen S. Fukushima, senior fellow at the Center for American Progress, who worked at the Office of the US Trade Representative under two presidents. “There are going to be two major differences: the Biden plan will be a national plan that won’t leave everything up to [individual] states, and the second will be international cooperation.”

In November, Biden reportedly told Suga he wanted to renew the US’s pledge to defend Japan, as well as to join efforts to address the pandemic and global warming. Suga intends to visit the US as soon as April for a summit to reiterate mutual interests, as well as stoke global recovery.

Research and analytics firm Fitch Solutions sees a strong economic jump coming in the US, Japan, and Europe in 2021. The Eurozone is predicted to lead expansion with near 5% growth, and Japan and the US with nearly 3% and 4% respectively.

“Japan and most of Europe will take up to four years to return to 2019 growth levels,” says Cedric Chehab, global head of country risk at Fitch Solutions. “The US will only take one year.”

Suga and Biden are also likely to quickly bond on the environment. The Japanese prime minister has announced his goal of making Japan carbon-neutral by 2050 as part of a raft of eco-initiatives. The country has pledged at least ¥1 trillion for green initiatives, including tax breaks and incentives to boost renewable energy infrastructure. Meanwhile, Biden is returning the US to the Paris Agreement on climate change.

“Japan will welcome his returning to the Paris accord” says Kingston. “Biden’s eco-agenda will open up great opportunities for Japanese producers in the US, and American firms in the environmental sector would welcome the market possibilities in Japan.”

Fukushima says Biden also sees economic opportunities in green initiatives: “He believes that the climate change agenda will result in not only trying to better the environment, but also in creating jobs for Americans.”

EC President Ursula von der Leyen said she saw a “new dawn” in the alliance with the US, while EU officials hailed Washington’s rejoining the Paris accord.

“The EU welcomes the decision,” said EU Executive Vice President Frans Timmermans.

The US and the EU, the world’s second and third largest greenhouse gas emitters, now seek to yoke environmental efforts ahead of the COP26 conference in Glasgow later this year. The EU has pledged to cut greenhouse emissions 55% by 2030 and, like Japan, to be carbon neutral by 2050.

A 21st century consideration of the US–Japan relationship must also reflect how each interacts bilaterally and multilaterally with the world’s No. 2 economy, China. Over the past four years, China’s ties with the US have deteriorated significantly on issues such as trade and defense.

“China is becoming increasingly more powerful,” says Fitch’s Chehab. “There is a Cold War brewing between China and the West regarding how the state apparatus works.”

The EU has recently forged ahead with the signing of a trade investment pact with China covering non-tariff barriers to business. But critics argue the deal will make it more challenging for the US to put up a united Western front with the EU to pressure China into accepting a rules-based international order and improving its human rights record.

Kingston and Fukushima say the US will tone down its rhetoric and look for multilateral solutions, as well as selective engagement with China.

“It will be difficult for Biden to hit the reset button [on relations with China], even if he understands the importance of greater dialogue and dialling down the vilification,” says Kingston. “There will be no significant shift in the US security stance in Asia, but America will re-engage multilaterally.”

“The Biden camp’s view is that China is a competitor and a rival — but not an enemy,” says Fukushima. “If there are areas that we can cooperate on, and the US can benefit from, then we should, on global issues, including the pandemic, climate change, and nuclear non-proliferation.” 

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